Comcast Predicts Usage Cap Within 5 Years 475
finalcutmonstar (1862890) writes "With net neutrality dying a slow painful death, it is no surprise that in an investor call yesterday Comcast executive VP(and Darth Vader impersonator) David Cohen predicts bandwidth caps within the next 5 years. The cap would start at 300 GB and cost the customer subscriber an extra 10 USD for 50 GB. But, Cohen stated that 'I would also predict that the vast majority of our customers would never be caught in the buying the additional buckets of usage, that we will always want to say the basic level of usage at a sufficiently high level that the vast majority of our customers are not implicated by the usage-based billing plan.'" Update: 05/15 13:58 GMT by T : Correction: Cohen is actually talking about data transferred, rather than stored (as headline originally had it), as reader MAXOMENOS points out.
Caps Are Definitely Coming (Score:5, Interesting)
Caps will definitely come. Not because they are "needed to help manage network congestion" or some other reason that the ISPs will trot out. They'll come for four simple reasons.
1) Video over the Internet threatens their own video services. Caps help make Internet video more expensive (via overage fees) and will help drive people away from Internet video.
2) Even if people use Internet video, the ISPs will get more money and they can never resist the smell of money.
3) The ISPs have monopolies (or near monopolies) in their service areas so they can do whatever they want and the public needs to take it.
4) They are big and powerful enough that they will make sure they have enough politicians "donated to" to prevent any government action against them.
Of course, they will keep on trotting out the "small group of users is slowing everyone's speeds down and caps will make them pay their fair share" line to justify the caps. The real cause of any slowdown will be because they take their profits and don't reinvest them into upgrading their networks. After all, why upgrade? It's not like there are any competitors to beat in the market or any government officials with backbone to pressure them into speeding up connections.
Comment removed (Score:5, Interesting)
Comcast already has a bandwidth cap (Score:3, Interesting)
They just refuse to tell anyone what it is, or give you any warning that you have violated it before they disconnect you.
The thing that is most amusing about these people is that, out of one side of their mouths they whine about how they don't have the capacity to give everyone truly unlimited Internet like they advertise, but out of the other side they have as much as anyone is willing to pay for, with no limit.
It really is time to label Internet service as a public utility and place it under proper regulation.
Re:Only pirates & terrorists need more than 30 (Score:4, Interesting)
Re:Editorial (Score:5, Interesting)
1. Void all local agreements giving exclusive access to a community to one internet provider.
2. Mandate that they are able to accommodate ALL the bandwidth they sell at any time.
3. Separate the businesses into a content side and a Access Provider side. Content side pays the same as all other content providers. Access Provider charges the same to all Content Providers.
4. NO limits on what you can do with your bandwidth.
Re:Coded language? (Score:4, Interesting)
Typical rent seeking corporations more money in return for less. before you say free market go someplace else. Make the market free so there is someplace else to go
Re:Editorial (Score:5, Interesting)
2. Mandate that they are able to accommodate ALL the bandwidth they sell at any time.
We already have this. Go look up leasing a T3 connection for your home; Guaranteed 44Mb line. Expect to pay several thousand dollars per month.
Your home broadband connection is oversold, and that's fine. That's why it's cheap, and it is very cheap. The problem is that they didn't tell you that that was how it was, and instead sold you on "up to $Mb download speed". Now that there are services that will actually saturate your 20Mb line 24/7 (bittorrent, netflix, whatever) the connections are congested. It's like putting all of the cars on the motorway at once; Nobody will get anywhere.
If the model was shifted to paying for the data you use regardless of your line speed, at least it would be fair; You get what you pay for, no more, no less. I watch netflix, I download ISOs and games on Steam, and I rarely hit north of 150GB in a month. This scheme seems fine to me. Then again, I'm looking at this through the rose-tinted glasses of a consumer, not a greedy corporate sociopath. I'm sure they'll have us bent over again soon enough.
Re:Last three months (Score:4, Interesting)
Re:Coded language? (Score:2, Interesting)
I use the xfinity streaming site and pay for HBO and use HBO GO through Comcast and still see my data usage go up from using those services.
These are both services that I am paying Comcast for that count against the cap.
Re:Caps Are Definitely Coming (Score:5, Interesting)
The vast majority of ISPs in this country do not have the vast majority of customers. The vast majority of end users (you know - ma and pa Facebook user) are on Comcast, Verizon, AT&T or Time Warner (soon to be Comcast). Comcast and Time Warner are content providers as well as bandwidth providers. Verizon and AT&T are the old phone company monopolies (AT&T and GTE). With that oligarchy of companies, policies and pricing set will drive the market. As far as the majority of money going to fees - the last year each of the companies mentioned didn't exactly have losses or even just make a couple bucks. Record profits - not quite.. but definitely in the range so the race to the bottom is still putting the gold plate on the swimming pools. As far as streaming - how many of those Facebook posts have videos attached to them? 25 cute cat doing something adorable videos a day will start to knock on those bandwidth caps fairly quickly. And lately those videos don't require you to click on them to start - they run quietly in the background and you don't notice them until you turn up the sound.
Don't mix up business users with consumers - different animals with different use patterns. And for a history - look at cell phone - and land line usage. (wondering if you're old enough to remember when calling cross-country was a once a month thing to talk to grandma instead of doing so on a whim)
Re:Amount of data isn't the only thing that matter (Score:4, Interesting)
Re:Coded language? (Score:4, Interesting)
Honestly, I wouldn't have any problem with non-neutral networks if there was competition. Those of us who cared would flock to net neutral competitors, or competitors whose QOS favored our packets of choice. Let's face it, this is an area that just cries out for a natural monopoly. And just about every economist agrees that natural monopolies must be heavily regulated to function in the public's best interest.
Cost per GB is relatively minor (Score:5, Interesting)
Disclosure: I'm a certified cost accountant.
Everyone north of Tier 1 providers pay per gigabyte of data they transfer over Tier 1 backbones.
The cost per gigabyte of data is a relatively small percent of the cost incurred by companies like Comcast. Comcast's gross margins are somewhere around 70% and the cost per gigabyte would properly be accounted for under Cost of Goods Sold (also called Cost of Revenue - second line on the income statement under Revenue). Comcast's net margins are around 10% which means that the cost of moving data cannot account for more than around 30% of their expenses even if every penny of COGS was used to pay for data - which it definitely is not. In reality the real number as a percent of their total expense is probably somewhere around 10-15% at most. It's not trivial but it is a small percentage of what they actually pay out each period.
Paying per gigabyte is how the internet actually works;
I assure you that the cost per gigabyte is only a relatively minor portion of the costs involved and realistically it's not the biggest one. Don't confuse revenue models with cost models. Most of the actual cost of the internet (far in excess of 50%) is in hardware, maintenance, electricity, sales and overhead. All of these are fixed costs, unaffected by your data usage. Don't take my word for it, look on their financial statements yourself.
Re:Coded language? (Score:5, Interesting)
My solution is, and will continue to be, last mile is owned by Municipality. Bring it into a centralize COLO facility, and provide access (by auction) to the top 5 bidders., each given exactly the same space. This way, a residential unit (household) can go to the five, request prices / services and pick the one they like the best. The COLO configures the switch and the residential unit is serviced with exactly what they want, at a price they can shop against.
The problem isn't last mile, that problem has been solved. The problem is servicing the last mile in a way that allows for competition. COLO is the only way to provide open and free marketplace to the customers AND providers.
But this requires a shift from leased right of ways to Municipal Managed last mile.